KPL
(KPL/VNA)Japan’s Mizuho Financial Group will provide financing to help close coal power plants ahead of schedule in Southeast Asia.
(KPL/VNA)Japan’s Mizuho Financial Group will
provide financing to help close coal power plants ahead of schedule in Southeast
Asia.
Mizuho now has tight restrictions on new
financing for coal power facilities that prevent it from funding early
shutdowns.
The company plans to change this policy in
July to allow limited financing that helps operators move away from the carbon-intensive
fuel. Other Japanese megabanks are considering such transition financing on a
case-by-case basis.
Asian coal plants often are run via joint
operating companies set up by multiple investors. These come with capital plans
over a certain period of time that would be derailed by an early shutdown.
Mizuho will offer financing to help operators
repay external loans taken to build these facilities or pay out promised
dividends. Letting investors recoup their money ahead of schedule might
encourage operators to close coal plants sooner.
The funding will carry conditions such as
having recipients pledge to pivot to renewable or low-carbon energy projects.
Efforts are underway to accelerate coal plant
closures in Indonesia. The capital needed can vary widely depending on the size
of the facility and how early it is being closed, but the cost of shuttering a
plant in Indonesia 10 to 15 years ahead of schedule has been estimated at up to
300 million USD.
The United Nations has called for members of
the Organisation for Economic Co-operation and Development to phase out coal
power by 2030, with other countries following by 2040.
According to Global Energy Monitor OECD
countries will cut down 70% of coal capacity within that time frame, and 6% of
capacity outside the OECD.
Japanese banks have pledged to zero out their
outstanding financing for coal projects by fiscal 2040. Mizuho cut its total
domestic and foreign funding from 299.5 billion JPY (1.92 USD) at the end of
fiscal 2019 to 235.5 billion JPY at the end of fiscal 2022.
KPL
